Food innovation, the industry with a dozen faces!
One founder’s food innovation journey and lessons learned.
I consider myself a decent person. I started and finished college on time and landed my first job just one month after graduating. I decided to get married ASAP and start my family as soon as possible. At the time, I was sure I wanted a big family, but I am now more than satisfied with my perfect family of four.
I am a person who likes to get up early, but I also like to watch good movies until late, not always a great combination my family and colleagues will tell you I am sure.
I am the owner of a food startup Tosla and am definitely guilty of not giving myself enough slack, time to unwind and look after myself, but I believe I must do my best out of respect for my colleagues and the work they put in every day to help make my business a success.
For years, I worked in the investment banking industry but luckily got out before 2008, something I am very grateful for. I never really bought into the spin of the industry. I found it ridiculous. All of it. My colleagues, our valuations and especially the companies we were buying. I decided to leave a good position in times when the food sector was not trending. I worked my ass off, all the while listening to the various and plentiful barrage of insults from my ex-colleagues and industry contemporaries.
For some time, I was called the piggy boy.
Yes, my first food venture was connected to pig farming and animal feed. The money was decent and I can honestly say after 10 years of experience, money wasn’t always descent in the food industry. That being said, the people in this industry were nicer, maybe because they had the opportunity to do something they love, rather than stare at figures in company reports, and deciding which growing businesses were of value. This might be right for some, but it was definitely not right for me.
I started Tosla in 2014. We started by doing fruit compounds and preparations for the food and beverage industry, and we still do that to this day. It is a niche for us, and it gives us a stable structure to continue to innovate and build ideas in other areas of the business.
From day one I was restless, and I wanted to invent stuff. I knew that I needed to give a large amount of attention to our core business, but also had a passion and drive to innovate. So, that’s what we did. We went into the nutraceuticals area and eventually started our sugar reduction and white label department. It was not easy. It is still not easy. We burn a lot of our resources, which I compensate with earnings from nutraceuticals. It is a trade-off, which I do from my heart to continue down the path of building an area of the business that I am truly passionate about.
Innovation and ingenuity were the building blocks of my entrepreneurial path from my early beginnings. It went so far that at one point I was part of a team that invented multi-vitamin poultry meat. You read it right. We were crazy. But the timing was not right. It was just after 2008 and people thought that this functional meat was “toxic”. Unfortunately, food advocates were still burning fuel on their conservative stand (anti-GMO was at its peak) and I never thought of making plant meat as I thought tofu already explained it all. It is funny to look at the market today, and think that with all of my innovative spirit, these simple ideas simply did not occur to me. C’est la vie.
I believe today is completely different. There has never been a more favorable moment to be an innovative food startup. The opportunity that is in front of people now is unbelievable. We are seeing a swing from blind patronage of big labels, to consumers making the choice to support small business and private labels. And I plan to enjoy it while it lasts and do everything I can to help build this emerging market.
For some time now Tosla has pioneered in the artificial sweetener space with our core project named Sladcore. We all know table sugar is everywhere. It tastes good. But it also accelerates chronic diseases, so we wonder how would it look like if we reformatted it? Challenge the status quo. Innovate the most basic of ingredients.
But it is not that easy. Big corporates spend hundreds of millions on innovation but have little to show. It is not the money that determines success, it’s the idea and the drive of the people who are passionate about making the idea a reality.
Mostly, today, innovation is focused on design or NPD, but truth be told, there is not a lot of room for invention when we look at the chemical side of things. It is just too hard to beat nature. On the other hand, you will find a lot of “fake” innovation among startups acting more like a specific country advancement program that works hand in hand with good promoters, influencers, and innovative PR.
Fake stories, if you ask me!
Before I continue I would like to draw a parallel between these kinds of startups and a HBO documentary, The Inventor.
We in the food industry can give HBO less meat to chew, but there are similarities to the reference I gave above.
When your journey of innovation starts to become successful, that is the moment when shit hits the fan in the food start-up industry. You have all these tempting opportunities to take money from different accelerators, investors or VC’s but at the same time, if you are me, you try to keep independence and know-how for yourself. Not an easy game.
Like it or not, to succeed you need contacts and you need exposure. You don’t want to sign a devil’s deal, but you know your resource limitations. So, you try to establish connections that will help you on your journey to success, but you lack credibility. And on top of that, you need to drive your daily business at the same time as having a fearless focus on innovation. Catch 22.
Dealing with different VCs and accelerators is a pretty much open card business. You give them shares, they give you access to resources. All kinds of resources — contacts, corporations, money, media, etc. But dealing directly with corporates is a completely different thing. These guys are serious about their businesses but are starting to become aware that they are losing market share to the innovations of small start-up food companies. My advice in these situations is to be open, but wary. In my experience, some of the world’s biggest ass holes call big food companies their home. It seems to attract them like a magnet.
I know you will say that’s not everyone in big food, it’s just a percentage of them. Yeah, that is true, but that percentage isn’t small. During the last year and a half, we have signed dozens of NDAs and MTAs with some of the global food players, and for the most part, I can only compliment their professional behavior and conduct. But there is a good number of people who have a set agenda and will try to do whatever they can to build their brand, at the expense of yours.
Usually, big food companies will express an interest in meeting with you to discuss opportunities over email. They will conduct an informative call over the phone, followed by sending us their NDA.
After they have acquired the information they wanted from us, they make it clear on how to proceed.
But with douche bags it is different. They fly you there in style and insist on you meeting them at their headquarters, respectively. This can be painfully intimidating. They appear, from your lowly position to be oozing professionalism. True storm troopers!
If you are lucky, they invite you to participate in some of their innovation conferences. Sitting side by side with their top suppliers.
Before I continue: Funny fact, you will look feel like a dwarf, while the rest perceive you as a competitor.
Usually, the company executives would be calling in from different locations around the globe. All being projected to you the modern marvel of video conferencing technology. They continually reiterate the need to “think outside of the box”. They proclaim ‘innovation’ as the new big thing like it wasn’t already and the fact that they said it made it happen.
It gets exciting as hell.
The rules of this kind of game are supposed to be clear. The starting point is zero. No hidden agenda. The best man wins. And before you start innovating, they will set up a confidentiality package to safeguard your know-how: “Please don’t reveal anything before we cover off on the confidentiality issue.”
Oh, the simplicity and innocence.
You will go home full of good impressions. You will be confident you will become their partner. You will not be able to help yourself but do not share the excitement with family and friends (without revealing the name of the company; they will make you sign a confidentiality agreement before letting you out 😊).
Afterward, the big call will come. Your new corporate friends will call you to agree on the steps needed to be taken. Wow, you have a chance to get full engagement right way. It will blow your mind. You will be so excited.
“Yippee ki-yay, motherfucker!!” — in the words of John Mcclane.
But there is a catch. There is always a catch. There will always be one of them who will ask you subtlety to give him a small piece of information. Nothing big. Just a friendly tip on how you plan to deliver it.
But you will say: “No go, man. No NDA. No info!” As they advised you earlier.
And then a full blow from the “nice” lady listening in: “….you are correct, but we meant it for the existing technology suppliers (read it: big corporates with fat legal departments). We don’t really know you and if we are taking risks, we need to understand the technology. And for the time being, we are not willing to sign NDA with your company.”
OMG, you are left with a decision. You send the information they are seeking and still have a chance of working with them or you don’t send info and pretty much solidify the fact that you won’t.
You love your work. You love your colleagues. You love your know-how. So, you make the choice to protect yourself and your information, at the risk of not getting the deal.
So what happens next? Well, in my experience, 6 months later you find out that your competitor has been backed by THAT big corporate and has taken on a venture capitalist that has given them the opportunity to promote the shit out of “their” idea on the internet. The idea, your idea has been stripped back, revarnished and looks like a brand new model. Carry on another 6 months and that start-up competitor will have been bought out by one of the biggest food technology suppliers for a stupid amount of money, and the big food business will get your idea anyway. Them’s the breaks.
This story is not intended to discourage you. Just the opposite. I have met so awesome women and men from the top food companies that strengthened my belief in the industry and inspired me to continue building my business. All I wanted out of writing this article is to give you some examples of events that may or may not happen to you when dealing with big business, so you might know what to look out for to make the right decision for your business.
The journey is not made of golden bricks laid in front of you. Usually, it is long, dirty and lonely. The way it should be. The right way! Don’t get fooled by false diamonds.
My writing is based on true events and stories. It is as real as it gets. I changed parts of the stories and excluded real names as I don’t want people to get hurt. But most of the stuff I write is authentic and includes my personal thoughts and feelings.
